UPDATE 1-Sirius Minerals wins sales deal with U.S. company

Reuters Staff

2 Min Read

* Co to sell at least 500,000 tonnes of polyhalite a year to a Fortune 500 U.S. company

* Buyer could take additional 500,000 per year

* Shares up as much as 9 percent

Jan 21 (Reuters) - Potash miner Sirius Minerals Plc said a deal to sell at least 500,000 tonnes of polyhalite a year to a U.S. company had bumped up sales commitments to 96 percent at phase 1 of its controversial potash project in Northern England.

The miner did not identify the buyer but said it was a Fortune 500 agri-business.

The news sent the AIM-listed miner’s shares up as much as 9.26 percent, making it one of the top percentage gainers on the London Stock Exchange on Tuesday morning.

Sirius Minerals, which has been struggling to get permissions to mine polyhalite beneath the national park in North Yorkshire, said last week that it would re-apply for fresh planning approvals by July.

A large portion of the company’s $1.7 billion project sits under the national park in North Yorkshire.

The company said the pricing of the deal was based on the market price of nutrients contained in polyhalite and in line with previous guidance.

Sirius Minerals said it had agreed to sell at least 500,000 tonnes per year of polyhalite - a form of fertiliser ingredient in potash - for five years with a possible renewal for a further five years.

The deal would take sales commitments for phase 1 of the project to 4.8 million tonnes per year, just shy of its 5 million tonne production target.

The U.S.-based buyer could take up to an additional 500,000 tonnes per annum, Sirius Mineral added.

“We consider this the company’s most significant offtake agreement to date,” Liberum analyst Richard Knights wrote in a note.

The company signed an agreement in December to supply 500,000 tonnes per year of polyhalite to Sichuan Agricultural Means Group (Sichuan AMPC).

The stock pared most of its early gains to trade up 3.7 percent at 14.15 pence at 0827 GMT.